Operating income is the difference between operating revenues
and operating expenses, but it is also sometimes used as a synonym
for EBIT and operating profit.[2] This is
true if the firm has no non-operating income.

A professional investor contemplating a change to the capital
structure of a firm (e.g., through a leveraged
buyout) first evaluates a firm's fundamental earnings potential
(reflected by Earnings Before Interest, Taxes, Depreciation and
Amortization EBITDA and EBIT), and then determines the
optimal use of debt vs. equity.

To calculate EBIT, expenses (e.g., the cost of goods
sold, selling and administrative expenses) are subtracted from
revenues.[3]Profit is later obtained
by subtracting interest and taxes from the result.